Global leaders in private aviation sales, marketing and ownership strategies, Jetcraft have over 20 offices worldwide and 56 years of industry experience. Jetcraft’s bold business strategies, along with its annual 10-year Market Forecast has established them as key industry leaders despite the turbulent global economy, and 2018 saw, for the first time in the company’s history, more than 100 transactions completed in one single year. Jahid Fazal-Karim, Owner and Chairman of the Board, talks about Jetcraft’s journey, and what the future has in store for private aviation.
Jetcraft is now one of the world leaders in private aviation, but how did it begin?
Founded in 1962 by Charles ‘Bucky’ Oliver, Jetcraft is one of the oldest and most well-established private aviation specialists. I became an owner of the company in 2008 and, as international markets presented new opportunities for business aviation and large business jets became the preference, we grew from a US-based company to an international corporation. We now have more than 20 offices worldwide, with operations in Russia, Dubai, Switzerland, Asia, Turkey, Australia, Africa, Asia and the UK.
Over our 56 years in the industry, we have facilitated hundreds of aircraft transactions, including more than 650 deals worth more than $12 billion in the last decade alone. 2018 saw us open a new London HQ and double the size of our European team.
What puts Jetcraft ahead of its competitors?
It’s our global reach that allows us to connect buyers and sellers from across the globe, help them find the best value and structure a seamless transaction. This unique global structure means we are positioned to provide regional expertise, and there is always a Jetcraft representative within a few hours of any one of our clients. Our Sales Directors know the local market, speak the local language and have facilitated numerous aircraft transactions in each locale. Our rich history, global reach and experienced teams mean we hold a distinctive position in the industry, situated between a traditional broker and a manufacturer. We also have one of the world’s largest inventories of new and pre-owned aircraft, and we’re one of the few companies with the recourses to invest in owned aircraft. With this, we have the ability to take in trades and offer our customers a seamless transaction. This type of trade-in transaction is proving to be very beneficial in today’s market, and I expect we’ll see even more trades in the future.
Why did you choose to open a London HQ? Is this an important market for Jetcraft?
London is a hub for our customers and our wider network. Looking at the worldwide growth of the business aviation industry over the past decade, we couldn’t afford not to be in London; it cements our commitment to the European region. Many of our clients have homes and business based in London, or come through the city at some point, and our business model is to be within a few hours of any of our customers.
Jetcraft’s 10-year Market Forecast predicts trends in the private aviation market – can you talk us through some of these trends?
As the world gets smaller and businesses become more global, the trend for larger, more expensive aircraft continues to rise. In our recent Market Forecast, we predict that the next ten years will see the Large Jet category, comprising Super Large, Ultra Long Range and Converted Airliner segments, constitute 32% of total units sold, and 64% of total revenue. With this, product offerings will completely change, as Bombardier, Dassault and Gulfstream each introduce new models to cope with demand.
The private aviation industry is made up of ultra-high-net-worth individuals and corporate clients. While the industry is benefiting from the rise in UHNWI buyers and the growth of family offices, there are challenges with corporate buyers in the near term. Fortune 500 companies have yet to return to historical aircraft purchase levels due to focusing on other financial priorities, such as share buybacks and paying down debt. They are, therefore, unlikely to jump back into purchasing aircraft for another few years.
On the other hand, UHNWI have benefitted from the current economic situation. It’s predicted that by 2022, over 3.6 million individuals worldwide will have a net worth in excess of $5 million. This wealth creation is spurring growth in family offices, and their roles are evolving. Family offices have expanded their service portfolio to include concierge and lifestyle services, with specialist tasks such as buying or leasing private aircraft. Together, with chartering and fractional ownership programmes, this is facilitating access to private aviation at unprecedented levels.
Overall, private aviation continues to grow and become more accessible. Our forecast predicts a continued growth in the overall global fleet of aircraft by over 30% in the next decade.
What advice would you give to a prospective buyer?
For prospective buyers, don’t overlook pre-owned aircraft. With the abundance of new models coming to market, there will be customers that always prefer to have the latest and greatest. But, those willing to consider pre-owned have more options and will benefit from more attractive values. That being said, inventory levels are low right now, especially for the most desirable aircraft five years and younger, and many are being sold even before they hit the market. Now, more than ever, it’s important to work with a trusted aircraft transaction specialist who has visibility to the latest inventory and market information.
What can you tell us about the future of the private aviation industry?
Our Market Forecast predicts a new business cycle of steady, healthy growth, expanding revenue and an overall continued growth in private aviation. The growing interest in fractional, charter and block programmes is only adding to the overall accessibility of the industry.
Advances in technology, particularly cabin connectivity, are becoming an important factor that may present residual value challenges for pre-owned aircraft that aren’t upgraded to the most modern standards. We expect advances in this technology to continue rapidly throughout the next ten years.
Finally, with the market now stable enough to predict aircraft values, we are seeing aircraft trades becoming more common again. Companies like Jetcraft, who have the financial resources to do so, are buying customers’ current aircraft to make the transition to a larger model more seamless. This type of trade-in transaction is proving to be very beneficial in today’s market and I expect we’ll see even more trades throughout 2019 and beyond.